Revocable living trust benefits in New York are considerable, and far too many people overlook this option. They have been led to believe that a simple will is the best asset transfer method to use unless your estate is very complex. In reality, this is simply not the case.
In this post, we will look at living trust benefits in NY to give you a better understanding of the options that are available.
One of the misconceptions about trusts is the idea that you lose control of assets that you convey into any type of trust. Actually, you retain complete control when you establish a revocable living trust. You would be the trustee while you are living, and you would have total access to the resources.
Along the way, you can convey additional property into the trust, and you can amend the terms if you choose to do so. Plus, the “revocable” designation is quite literal. If you want to revoke the trust entirely and take back direct personal possession of the assets, you are free to do so.
When you are drawing up the trust agreement, you name a successor trustee to handle the administration tasks after you are gone, and you list your heirs as beneficiaries. One of the benefits of a living trust is the ability to prepare for possible incapacity.
You can give the successor trustee the power to manage the trust if you become unable to handle your own affairs at some point. This is not a pleasant subject contemplate, but over 30 percent of people 85 years of age and older contract Alzheimer’s disease.
Add in the fact that Alzheimer’s is not the only underlying cause of cognitive impairment, and you can see that incapacity is relatively common.
The inheritors that are named in a simple will receive lump-sum inheritances. This can be a cause for concern if you are leaving resources to someone that is not ready to handle them. There are also people that have demonstrated poor money management capabilities in the past.
When you have a living trust, you can include a spendthrift provision. After your death, the trust will become irrevocable, and the beneficiaries will not have direct access to the assets. Their creditors would “step into their shoes,” so they would not be able to reach the assets either.
With regard to the distributions, you can dictate terms. For instance, you can instruct the trustee to distribute the earnings that are generated from invested assets broken up into monthly increments. This is an example, but you have freedom with regard to the way the assets will be distributed. A living trust can remain active for up to 21 years.
When a will is used to transfer assets, it will be admitted to probate. In New York, this process takes place under the supervision of the Surrogate’s Court. No inheritances are distributed while the estate is being probated, and it will take about nine months if there are no complications.
This is one of a number of different probate drawbacks. On the other hand, when you have a living trust, the trustee can distribute assets to the beneficiaries outside of probate. As a result, there is no court involvement, and this simplifies and streamlines the process.
Shared Living Trust for Married Couples
A living trust can be an ideal estate planning device for some married couples. If you own a lot of property jointly with your spouse, and you intend to leave your respective interests to each other, a living trust can work out perfectly. After the death of one spouse, the survivor would become the sole trustee, so there is continuity.
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Our doors are open if you are ready to work with in Manhattan, NY estate planning lawyer to take advantage of the benefits of a living trust. You can call us at 212-973-0100 to set up a consultation appointment, and you can use our contact form to send us a message.